Liam Croke: Financial stress the silent epidemic

It can be a big ask to expect your employees to show up, be ready for work and handle company business, when all the while they are financially stressed out and barely able to make ends meet.

It can be a big ask to expect your employees to show up, be ready for work and handle company business, when all the while they are financially stressed out and barely able to make ends meet.

An employee’s life doesn’t switch off during business hours and this is certainly what I have encountered particularly over the past couple of years when working with organisations and their employees.

Time and again, no matter how big the company is and no matter how much the average salary is, I hear things like; “I can’t pay my mortgage”, “I am trapped in negative equity”, “should I stop paying into my pension”, “I don’t have any money and I can’t save”, “are my savings safe”, “how can I afford to put my child through college” and so on.

For many people financial matters can be scary and they are complicated and to make matters worse people lack the time and expertise to make effective financial decisions and to compound things even further, they clearly do not know who to turn to for unbiased, trusted advice.

There is no doubt that the impact of the recession has created financial fear and uncertainty in the minds of most working men and women. But I wanted to find out more, I wanted to know what was stopping employees from every grade and salary alike from being the best they could be at work AND from their night’s sleep.

So at My Money we commissioned a report carried out by Amarach Research just last month and an example of what we found was:

- 577 people don’t go to work each and every workday because they are financially stressed

- This absenteeism figure is costing the companies they work for close to €1 million per day

- Those that do go to work, spend on average 37 minutes each day, paid by their employer, distracted and pre-occupied by financial issues

- At best, financial stress in the workplace is costing Irish Businesses €2 billion per year

- 6 out of 10 people under financial stress feel it is impacting on their ability to work, and this figure is higher among men and those in the 25-34 age group

- 41% of people unable to sleep at least once a week because of money worries

- 2/3rds of employees have debt that they said is threatening to overwhelm them

- 39% of people are living pay cheque to pay cheque

- A financially stressed employee misses on average 9 days each year from work

- 41% ask their family or friends for family advice and information. Only 22% ask their banks (I wonder why!)

The survey findings only confirmed to us what we knew already because we have been dealing with the day to day realities of people and we knew what has been going on in their lives and how they have been feeling. And because no survey of its kind has ever been undertaken, we are convinced that what we have uncovered is a silent epidemic of financially stressed people, the size of which even surprised us.

The reality is that there is very little formal financial education provided in our country and you can’t help but recognize that this is a very serious concern.

Organisations who think that “It’s their (employee) debt, then it’s their problem and no concern of ours” need to re-think this and fast because unless their workplace is unique at least 57% of their employees, regardless of their position or salary, are costing their company significant losses every day of the year.

And the reason a company should help staff should not be motivated just to increase the bottom line, they should do it because it is the right thing to do and doesn’t it send a very strong and powerful message to their employees – “We care about you, we know you might be struggling financially but we want you and your family to have a secure financial future which is why we are going to provide you with the tools, resources and support to achieve just that”.

The problem is that there is a, disconnect in that the majority of financial advice in the workplace is only around retirement planning but we know that employees want help in all aspects of their financial life starting with how to manage their money more effectively each month, because financial stress usually arises from employees who are unable to meet their monthly obligations and not from feeling they are investing too little into their pension plan.

Like any other personal problems, you can either treat the symptoms of financial stress or you can treat the causes. Treating the symptoms only teaches people how to deal with their financial stress and doesn’t prevent it from recurring again.

If organisations want a more productive, creative, passionate workforce, they must treat the cause of stress and take the lead in helping their employees how to manage their own money and how to reduce debt levels.

Employers who stay ahead of the curve will reap the benefits of increased profits through better employee productivity, lower absenteeism, less work time wasted dealing with financial concerns, lower turnover and better employee health.

And as the financial climate looks set to get even more confusing and volatile, it is more imperative than ever in my opinion to put in place a financial education support system that will benefit employees and the employer alike. They must because both of their long term futures depend on it.

Liam Croke, along with being the Managing Director of Harmonics Financial Limited is also the co-founder of My|Money (www.my-money.ie), an online portal to help employees access financial information and tools to manage their finances.

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